Soya beans and its derivatives were 2/3 of ITC’s agricultural export business. In 1998, IBD grossed $100M in agricultural commodities sales while ITC total sales were $2B.
Problems Soy Bean Farmers Encountered
1.Inefficient agricultural supply chain system
2.Limited technology resources constrained dissemination of know-how in rural farming communities 3.Lack of access to quality inputs – seeds, herbicides, pesticides and weather information that would improve crop quality and process of bringing it to the market 4.Farmers and ITC did not reap financial benefits from any profits made off soy bean derived materials (lost 60-70% of potential value of their crop with agricultural yields of only a third to quarter of global standards) 5.On the output side, middle men clogged the supply chain; reducing profit margin for farmers and buyers – unfair practices in weighing produce, delayed payment, delayed process which increased transaction cost and slashed profit; farmers and buyers were locked in unproductive cycle 6.Due to farmers limited capacity for risk, they minimized their crop investment (weather and pest impact); resulted to lower crop value, slim margin leading to aversion from trying new farming methods
Undermining Factors of Indian Agriculture
1.Reduction of cost and inefficiencies in the supply chin
2.Fragmented farms, over dependence on monsoon, lack of sophisticated inputs and farming practices 3.Ineffective chain for agricultural goods
4.Auctioning system of weight manipulation, deferred payment, crowded market which took 2-3 days wait to access, chaotic teens harassing farmers, time pressure, untimely cash flow, inability to turn down CA’s offer, lack of storage facility for perishable Soy, unable to leverage funds, farmers isolation from each other, lack of telecommunication to...